The plant-based revolution is here, and plenty of food stocks are becoming big players in the market.
People all over the world are adopting healthier, meat-free diets.
Just in the U.S., for example, 9.7 million Americans now follow a plant-based diet, up from 290,000 in 2004, according to a study by Ipsos Retail Performance, as noted by The Beet.
Globally, the market could be worth $74.2 billion by 2027, says Meticulous Market Research.
It also helps that some of the biggest food companies in the world are adding plant-based options, including Tyson (NYSE:TSN), Smithfield, Hormel (NYSE:HRL), and Nestlé (OTCMKTS:NSRGY), for example. Food giant, Unilever (NYSE:UL) set an annual sales target of $1.2 billion for plant-based food by 2027.
Even McDonald’s (NYSE:MCD), Restaurant Brands International’s (NYSE:QSR) Burger King, Inspire Brands’ Dunkin’, and Yum! Brands’ (NYSE:YUM) Pizza Hut are offering plant-based menu options, all as millions of people adopt healthier lifestyles.
“We are seeing in every single country in the world a shift towards more plant-based diets, even in emerging markets,” says Alan Jope, Unilever’s CEO, as quoted by The Guardian.
With the plant-based food trend showing no signs of cooling, some of the top plant-based food stocks to consider include:
Plant-Based Food Stocks: Beyond Meat (BYND)
Beyond Meat is one of the most well-known of the plant-based food stocks.
Opening on May 26 at $124, it’s also one of the most oversold. However, that may not be the case for much longer. At the moment, the stock is pivoting from oversold relative strength (RSI), MACD, and Williams’ %R. Near-term, I’d like to see the BYND stock challenge resistance at $142. Longer-term, I’d like to see it back above $200 a share.
Bernstein analyst Alexia Howard upgraded the BYND stock to outperform with a price target of $130. “Overall, we believe that Beyond Meat should be recognized as a reopening play that stands to regain meaningful momentum over the coming quarters,” she said, as quoted by Barron’s.
I’d use weakness as an opportunity with Beyond Meat, especially with the plant-based market quickly growing.
Tattooed Chef (TTCF)
Tattooed Chef is quickly becoming a leader among plant-based frozen foods. It has many top sellers, such as cauliflower mac and cheese, zucchini spirals, cauliflower burgers and veggie hemp bowls.
With millions shifting to a far more health-conscious, meat-free diet, the $1.85 billion company is seeing some impressive earnings. First quarter revenue was up 59% to $52.7 million. Gross profit was $13.7 million. Adjusted EBITDA loss was $3 million, as compared to $7 million year over year.
Sarah Galletti, Chief Creative Officer, added, “We are revolutionizing plant-based eating with the Tattooed Chef brand by tapping into consumer preferences and constantly bringing new ideas to the market. Our recent product launches in retail have been very successful and with the addition of our new manufacturing capabilities with the Foods of New Mexico acquisition, we have a pipeline of over 250 plant-based innovation ideas including ambient products and snacks,” as quoted in a company press release.
Plant-Based Food Stocks: The Very Good Food Company (VRYYF)
The Very Good Food Company makes meat-free food with beans and vegetables. With products ranging from taco stuffers to its best-selling Big Box of (Plant-Based) Meat, the company is carving out quite a name for itself. Helping, the company just announced a retail distribution partnership with United Natural Foods (NYSE:UNFI).
There’s a good deal of growth here. Fiscal 2020 revenue soared 364% higher to $4.6 million from $999,797 year over year. E-commerce sales were up 1,403% to $3.38 million from $225,121 year over year. Wholesale revenue was up 438% to $840,490 from $156,137.
Going forward, the company has plans to open a new 45,000 sq. ft. facility in Vancouver, and a 25,000 sq. ft. facility in California, which will allow it to duplicate what they’ve already done. It also wants to expand from 275 retail stores and 1,300 points of distribution to 3,000 retail stores, and 15,000 points of distribution.
Opening on May 26 at just $3.92 a share, this $357 million company has plenty of growth in front of it. I’d buy it, forget about it, and check back in a year or so.
On the date of publication, Ian Cooper did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Ian Cooper, a contributor to InvestorPlace.com, has been analyzing stocks and options for web-based advisories since 1999.